Amazon this week rebuffed a report that it would be sunsetting its free ad-supported streaming TV (FAST) service Freevee and incorporate it into Prime Video. But while Amazon says Freevee continues to be a key offering, certain analysts think the FAST and its positioning creates a lot of confusion.
On Wednesday AdWeek, citing people familiar with the situation, reported Amazon would shutter its Freevee FAST, potentially in the second quarter, in part to streamline the company’s ad-supported offerings to focus on Prime Video (which added ads January 29) and address the redundancy of content found on both platforms. Sources in the report also seemed to suggest Amazon would use free Freevee content in front of a paywall on Prime Video to attract potential customers to that service and then upsell viewers into paid subscription tiers. The report wasn’t definitive on the plans, as one part said Amazon might delay closing Freevee if consumers push back against ads on Prime Video or too many choose to upgrade to the ad-free tier.
Reached by StreamTV Insider, an Amazon spokesperson rebuffed the report and called it inaccurate.
“There are no changes to Amazon Freevee. Amazon Freevee remains an important streaming offering providing both Prime and non-Prime customers thousands of hit movies, shows, and Originals, all for free,” the Amazon spokesperson stated.
While Amazon called the report inaccurate, the statement fell short of saying whether any changes to Freevee are in the works or if a shutdown could come at a later date.
Speaking to StreamTV Insider, analysts Alan Wolk from TVREV and Colin Dixon from nScreenMedia agreed there were some issues with the suggestion that Amazon could use Freevee as a funnel to push new customers to paid Prime Video subscribers. While Amazon doesn’t disclose Prime Video subscriber metrics, the service has high penetration in the U.S. as it’s included with Prime membership that comes with benefits like two-day free shipping, among others. Recent estimates from MoffettNathanson modeled around 96 million U.S. Prime households, of which only some are actively watching Prime Video. And analysts were skeptical about how large of a market there is for consumers interested in just Prime Video that don’t already have it.
Since most who get Prime Video may also subscribe for added benefits of Prime membership, converting a viewer of Freevee content to a paid Prime Video subscriber would be a “bigger ask,” Wolk said, and likely not a huge market.
“I can’t imagine there is that many of them,” Wolk said, adding that approach wouldn’t seem to make much sense.
Dixon shared a similar sentiment, calling the suggestion “nonsense.”
“Virtually everybody’s got access to Prime Video. How many people subscribe to Prime Video separately? Virtually none,” he commented.
That said, while Amazon isn’t planning to shut down Freevee as of now, Wolk and Dixon weren’t altogether surprised by news that it would. Because while Freevee might not make sense as a draw to upsell viewers to paid Prime Video users, the analysts view its current positioning in the market as somewhat puzzling.
Freevee causes confusion
The analysts each cited confusion around Amazon’s approach to Freevee, particularly for consumers, as its not heavily promoted as its own app and there’s content overlap on other Amazon services.
With distribution across connected TV platforms and a standalone app, Freevee is distinct from Prime Video and Fire TV Channels (the free TV experience within the Fire TV platform), but content from the FAST can be found on both Amazon-owned platforms.
Wolk indicated Freevee’s positioning has always been confusing, suggesting Amazon hasn’t been sure what to do with it and noted the company doesn’t heavily promote or market the service as a standalone app, including on its other properties. It differs from Paramount Global’s Pluto TV and flagship Paramount+ service, where the two are clearly independent, both as products and content offerings (although the two do engage in cross-promotional efforts at times). Whereas Freevee content is already surfaced within Prime Video results – but without clear distinction that it’s available on a separate app, Wolk noted.
“Then, to make Amazon even more confusing, Amazon has a whole separate content play off of Fire TV that’s unrelated to Prime,” he said.
On one hand, Dixon said having Freevee “makes a lot of sense” because it doesn’t need to be tied to the larger Amazon ecosystem. Meaning, the FAST doesn’t need to be connected to Fire TV or Prime Video for Amazon to garner eyeballs and monetize and maximize the value of content through advertising via Freevee’s separate app that’s available on other providers’ platforms. But the analyst still cited a muddled strategic approach.
“The problem is that Amazon’s strategy has gotten very, very confused,” he said, like Wolk, calling out the Fire TV Channels free TV experience embedded on the CTV platform.
“It’s now incredibly confusing for consumers about what’s what, what’s where and under what rules you can watch it,” Dixon added.
In that regard, getting rid of Freevee as a brand and rolling it into Prime Video makes a lot of sense to Dixon, particularly if Amazon is seeing data showing that not many people are using the FAST service outside of Fire TV or Prime Video.
Wolk also said a sunset of Freevee “just helps streamline their offering,” both for consumers and advertisers.
Where does Freevee fit in?
While its current position may not be that clear cut, the analysts do think Freevee has a role to play in the Amazon’s video ecosystem.
Amazon hasn’t released data on Freevee usage, but following the report of a sunset, Wolk speculated the app wasn’t getting much traction. It hasn’t been heavily promoted by Amazon, and unlike competing FAST services such as Fox’s Tubi, Paramount Global’s Pluto TV and The Roku Channel, Freevee hasn’t garnered enough watch time to show up on third-party results, such as Nielsen’s The Gauge monthly snapshot.
“Some people found [Freevee], but for the most part, [Amazon] didn’t push it. And it’s an app, so you have to find it,” Wolk said. In contrast, Pluto and Tubi FASTs “have done a good job of promoting the fact that they exist.”
One avenue the analysts agreed Amazon could’ve pursued, where Freevee might’ve been more impactful, is as a focal point – or as Wolk described “the backbone” – of the Fire TV interface, similar to what Samsung or Vizio do with their respective Samsung TV Plus and WatchFree+ FASTs.
Confusion aside, there could still be reason to keep Freevee around.
“If off of Amazon properties, Freevee is making a meaningful contribution to revenue from that product, they will not shut it down,” Dixon said. “Content wants to be in front of the most number of eyeballs when its supported by ads, it’s that simple.”